With Google ‘fines won’t work’!

Jul 25, 2017

On both sides of the pond, regulators and companies alike are scratching their heads about how to handle the search giant’s move up the trip-planning funnel

Even as the European Union (EU) has been deciding that Google had gone too far, the giant group is moving further into travel. Koddi, a Texas-based travel metasearch management platform, has noticed that Google is checking if travellers would like it to search and book vacation rentals! So, Google is seeking to spread its mega-travel presence there, too. Hardly surprising given the surge in popularity of the rental economy!

“We are seeing a filter on some searches that allows a user to proactively filter down to ‘only’ vacation rentals”, alerted Koddi (three weeks ago). Right now, this appears to be triggered for certain cities – there is no option, as yet anyway, for San Francisco, for example, but for Paris and Berlin there are.

Koddi also adds that “notable vacation rental providers like Airbnb, VRBO and HomeAway are currently missing, though one has to wonder if they will be for long”.

Having entered more and more areas of the travel market through the introduction of Google Flight Search in particular, Google Hotel Finder and Google Hotel Ads, as well as the optimisation of Google Maps for hotel bookings, it obviously wants more. Google seems to be proactively seeking out demand for specific products while staying under the radar.

Google seems to be proactively seeking out demand for specific products while staying under the radar

Google knows what customers are looking for and is in a very strong position to deliver it. Having an enormous market share in both search and Android provides it with an overwhelming advantage.

Coincidentally at the same time as Koddi’s news, the EU was fining it €2.4 billion, deciding after a seven-year investigation that it has abused its internet search monopoly. It said that Google had broken EU competition law by exploiting the power of its search engine to promote its own online shopping service, at the expense of other price comparison sites. “It denied European consumers a genuine choice of services and the full benefits of innovation,” declared European Competition Commissioner Margrethe Vestager.

Google is, of course, appealing. In the US there is a different attitude. It is not wrong to be so powerful – key is whether it is believed that any harm is being done to consumers from reduced competition. So, after agreeing to make some business changes, Google was cleared by the US Federal Trade Commission.

Echoing the line taken by the US regulators three years ago, Del Ross, chief digital officer at business consulting giant McKinsey, put his view to the Eye for Travel Summit in San Francisco in March. This was that: “Google’s advantage, other than its size, is its relentless focus on meeting consumer needs more efficiently. Ultimately this will be good for the industry because it forces some of these large and complacent players to innovate and rethink their value proposition”.

In the Google-bashing camp is Bob Healy, CTO of tech firm CarTrawler, who told Eye for Travel that: ”Google’s strategy is like Donald Trump’s tax return. They are absolutely refusing to talk openly or have a debate about it!” Google, he maintains, is taking control of the “trip-planning funnel.” Critical mass achieved, Google would take the top of the funnel and concentrate it to squeeze others out!

The EU fine, say US media’s favourite techie venture capitalist, Elevation Partners’ Roger McNamee, is “not large enough to change Google’s behaviour”. He told CNBC in an interview that “the only thing that will change it is regulations that actually say you can or you can’t do something.”

The competition issue, in his view, with the tech giants – in which he includes Facebook and Amazon – is that “they do stifle innovation”. They just take over their up-and-coming competition, which closes the issue!

At the upcoming North America Summit(Oct 19-20), Del Ross, Senior Advisor, Mckinsey & Company will be moderating a ‘fireside chat’ on the ‘The State of Travel’ with Todd Henrich, SVP Corporate Development, Priceline